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On the folly of hoping for A, simply because You are trying to pay for A

Performance Measurement and Management Control: Measuring and Rewarding Performance

ISBN: 978-0-7623-1479-9, eISBN: 978-1-84950-571-0

ISSN: 1479-3512

Publication date: 4 August 2008

Abstract

Kerr's (1975) examination of the “folly of rewarding A while hoping for B” led him to encourage organizations to align reward system and desired employee behavior. Since then, much of the accounting and control literature has increasingly reduced the reward system to one of its components – incentive compensation plans – and has increasingly ceased to examine other behavioral levers used by corporations, thus implicitly or explicitly treating measurement and reward as a sufficient condition to obtain desired employee behavior. This chapter considers the complexity of the reward system (including its inevitable subjective dimension) and discusses its role, in connection with other important managerial levers, in corporations’ broader efforts to shape employee behavior. The chapter concludes with a review of literature streams in economics and psychology, suggesting that an intense incentive alignment approach may be self-fulfilling and hence counter-productive.

Citation

Manzoni, J.-F. (2008), "On the folly of hoping for A, simply because You are trying to pay for A", Epstein, M.J. and Manzoni, J.-F. (Ed.) Performance Measurement and Management Control: Measuring and Rewarding Performance (Studies in Managerial and Financial Accounting, Vol. 18), Emerald Group Publishing Limited, Bingley, pp. 19-41. https://doi.org/10.1016/S1479-3512(08)18002-9

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited